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3. Dealer Selection

Mitsubishi has gotten a lot of flak from enthusiasts in the past few years. Mitsubishi made a name for itself here selling tough and rugged pickup trucks and performance cars such as the Lancer Evolution, 3000 GTO, and Eclipse. Americans liked what Mitsubishi was selling—its sales peaked at 345,000 back in 2002. Since the recession, things have been a bit less rosy for Mitsubishi; the automaker’s lineup is a shadow of its former self. Still, the manufacturer seems staged for a comeback. We caught up with Mitsubishi executive vice president Don Swearingen soon after the debut of the updated 2017 Mitsubishi Mirage to find out how the company is doing and where it’s headed.

Motor Trend: So you guys have had a surprising amount of success with the Mirage.

Don Swearingen: Yeah, you know, when we first launched, it was interesting because the true buff books just killed it because it wasn’t the Evo. What we found is a clear, simple message to our consumers: starting price of $12,995, 44 mpg highway, and one of the best warranties in the industry. I think that resonated with a lot of people. I think we fit into a clear niche that wasn’t being filled by a lot of companies, and we’ve had great success with it. But as we look at our demographics of our buyers, it really falls into two groups: those between 16 and 25, and 60ish and higher. And they’re looking for two different things. The older, more mature audience is looking for that car that’s a great payment and reliability that they don’t have to worry about, but there is that warranty that will protect them. The younger people are trying to get into a car that is economical for them to drive. When it first came out, my son, that was the first thing he went to. He said, “44 mpg? I’m there!” … I think for people who are really interested in fuel economy, the Mirage is the car for them. I think what we really learned is that the buff books, that’s not a car for them, but we understand that, and that’s why it fits that niche. All customers are important to us, so we have to find that niche, and we have to communicate a clear message.

The other thing our dealers are doing is they’re [not only] putting that Mirage on their showroom and floor, but they’re also putting that Mirage over on the used side of their car lot because many customers come into the dealership not understanding they can afford a new car. When they’re out there and they’re willing to pay $13,000-$14,000 for a car, the dealer says, “Well, you can get this brand-new one with a warranty,” and it turns a lot of those used buyers into new car Mirage buyers.

MT: Have you found the low-cost, value-oriented end of the market to be underserved?

DS: Clearly it is in a segment that a lot of companies have left behind because, I think, a lot of companies just can’t give the features that these customers are looking for in a vehicle at that price range. We’ve been able to do it, and now we’re adding Android Auto and Apple CarPlay. [The Mirage is] the first vehicle in our lineup with that. A lot of people are saying to us, “Why aren’t you adding it into your higher trim?” We’re going to get there, but [the Mirage] appeals to more of a younger buyer, and we think it will get used more, and we think we will get more positive reaction from our consumers as a result.

MT: What allows Mitsubishi to build a car to that price point while others seemingly can’t?

DS: I truly believe that maybe they’re able to do it, that there just isn’t the margins in there for some of them. We’re building more of a world car now, which means it needs to fit into many markets and it just gives us an opportunity to do things that maybe some others may not be able to do.

MT: Is the Mirage sedan still happening?

DS: The Mirage sedan, we will [launch] in the U.S. in April at the New York auto show, and it will be for sale within a month or two afterward. We didn’t want to announce it [at the L.A. Auto Show] and have our customers have to wait five or six months. It’s going to be called the Mirage G4 here in the U.S.

MT: What does G4 stand for?

DS:[Laughs] Damn good question. To be honest with you, they have all different names all over the world, like “Attrage” [AND SPACE STAR! – Ed.], and for us, building name awareness on that name would be very, very difficult. So in one market they call it the Mirage G4, and you know something? That just sticks with you a little easier.

MT: Do affordable cars such as the Mirage signal where Mitsubishi is headed?

DS: Well, we are more of a niche player. Clearly we have to be very strategic about what we bring to the U.S. I can’t afford to have a car fail, meaning not appeal to the customer. We are spending our time doing more research about what consumers need and want in their car, and we’re trying to deliver on that. Our sales are up over 20 percent this year, 20 months of consecutive increases, and we’re hitting on all cylinders now. The key is we have to keep that going.

MT: How do you keep that going?

DS: Two ways: a great team of employees, and a great dealer network. You know, we went through some lean times as a company, and I’m telling you real lean. Frankly, we have a lot of great employees who stuck with us and who always focused on the light at the end of that tunnel. When it got lean, we had to help our dealers find a way to make a profit. We’ve increased dealer count, but our 20 percent increase isn’t a result of adding 20 percent more dealers. We’re trying to make sure every dealer is profitable because if they’re profitable, they can make sure they give a great experience to our consumers. So right now our dealer profitability is at the highest level it’s been since 2002. So they’re back. They’re moving in the right direction. They’re motivated. From a marketing perspective, we get our dealers involved in our advertising campaigns to make sure the message we’re trying to communicate can carry over to the dealers’ marketing strategies and communications. I think those two things have helped us tremendously.

MT: What are your dealers asking for next?

DS: More product.

MT: Can you be more specific?

DS: We’re seeing the greatest success in CUV. When we decided to move most of our focus about three years ago to CUV, it was before the transition really happened. No. 1 markets were [C- and D-segment] sedans. Now that the CUV has moved to the largest segment, I think the dealers are seeing that our company had the vision. Right now, the Outlander Sport is our No. 1- selling vehicle here in the U.S., and No. 2 right behind it is the Outlander. And they’re huge, growing segments here in the U.S.

MT: Do you see Mitsubishi becoming a company that only builds crossovers in the future?

DS: I see it more focused on CUV. We’re talking about our next CUV now. We’re talking that we’ll take the Outlander and move it a little up, and I mean up in size, so it will become a little wider, a little longer, and then we’ll bring another car in between the Outlander Sport and the Outlander.

MT: Would that be something from overseas?

DS: All our product is global now because we have to make sure that we have enough demand to make sure that the business case can be sustained throughout its lifecycle.

MT: Is Mitsubishi in a position to compete in the overall marketplace, or will it stick only to segments it’ll be able to compete strongly in?

DS: What you’re going to see out of Mitsubishi in the future is that we understand we only play in a few segments, but whatever segments we’re going to play in, we’re going to be there. We want to make sure we’re giving customers what they need. I think most customers clearly are looking for reliable transportation with the features that make that ride comfortable and enjoyable for them, and they’d like to do it at a reasonable price, and that’s what our goal is to deliver.

MT: Where do you see Mitsubishi in five years?

DS: Our growth plan is steady growth. We’re hitting 20 percent the last two years in increases; that isn’t what I plan and budget for. Mine is more a modest, around 10 percent, increase, but clearly I want to make sure we don’t step backward. And to do that, don’t get too aggressive, don’t get too greedy, but continue to have progressive improvement.

MT: Tell us about some vehicles you’re considering importing to the States. Are there holes in segments you think you can fill?

DS: Yeah, that’s where that other CUV is coming in. Clearly we’re going to look at [having] a family of CUVs, and then of course [we’ll have] hybrid technology. Plug-in hybrid is the drivetrain we’re going with in other parts of the world, and we will be introducing in New York the [production] Outlander in a plug-in hybrid.

MT: Where does that leave the Lancer Evolution?

DS: I think you’ll see performance move more to CUV; I think you’ll see a blend of combustion engine and electric. We’ve been doing some activities up at Pikes Peak and getting some great performance out of our vehicles, so I think that’s where you’ll see performance from us moving forward. It’s a new direction.

We do have our final edition Evo now. We have 1,600 of them, and we’re auctioning off No. 1 of them in San Diego with all proceeds going to Multiple Sclerosis research. We put it on eBay a couple days ago, and it has 16,000 views and is up over $40,000 right now, and with all the money going to charity. We’re going to auction off the last one, too; we just haven’t picked the charity yet. It’s the most powerful Evo we’ve ever produced [in the U.S.].

MT: Mitsubishi is known globally for its pickups and vans, like the L200 pickup and Delica van. Will any of these vehicles make their way to the United States?

DS: You sound like one of my dealers! Pickup truck is the one that’s requested the most. With all the diesel issues going around, we’re getting fewer requests for it, but clearly we would love to bring it in. We have an issue with the Chicken Tax here, and of course we don’t have enough volume to have a plant here in the U.S. build it. [The U.S. is] starting to look at removing it. If we could ever get that removed, and Congress is saying they’re working on it [with the Trans Pacific Partnership]—[our pickup] is built in Thailand for us, and they aren’t included in the first group of countries [that would have the Chicken Tax revoked if the TPP passes]. So once that happens, my goal is to do everything I can to get it to the U.S.

MT: Thanks for your time, Don. Anything else you’d like to add?

DS: Thanks, yes. We have also reduced our reliance on fleet sales because it really starts helping consumers with the residual value of their cars. We’ve tried to maintain a percent of below 10, while many of our competitors are up in the 20s and 30s. Sure, [fleet sales] can provide needed revenue into the company, but your long-term strategy should be around your customers, and your customers are those individuals who need to sell that car some point in time, and we really want to make sure the value is there for us and them.

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